Monday, June 23, 2008

The Debate on Airmiles and the Environmental Cost

Should we feel Guilty for Buying A Strawberry Grown in New Zealand?
There is a lot of media coverage and interest in the concept of 'air miles'. There is a reasonably good argument that says it is bad to buy food flown from the other side of the world because it unnecessarily contributes to carbon emissions. It is far better to buy local food that needs less transport and therefore helps to reduce global warming. There are also emotional arguments to support your local farmers, rather than buying from 'foreigners.'

From one perspective it seems crazy to buy a strawberry grown in New Zealand, when I could grow strawberries in my own backyard Whilst, I believe in reducing pollution, how powerful is this argument? And if it is crazy to import a strawberry from New Zealand why does it happen?

1. Transport costs are a relatively low % of production costs. Transport costs account for approximately 11% of the total GHG emissions. From producer to retailer, the % is only 4% . Therefore, if we buy locally, we will only make a small dent in overall GHG (Greenhouse Gas) emissions. [ - Report by Christopher L.Weber published in Environmental Science and Technology link]

If we were buying red meat locally, the environmental impact is far greater. Red meat is very intense on the environment. Red meat has 150% more GHG emissions than chicken or fish. The GHG emissions of chicken is similarly much higher than vegetarian diet. With meat, you have to grow crops just to feed the animals. These multiple layers of farming creates pollution much more significant than the transport costs.
  • If you really want to help the environment the answer is not to buy local but become a vegetarian or least eat fish and chicken. It is much better to import soya beans and strawberries from Brazil and New Zealand than it is to eat red meat from your local farmer.
2. Theories of Comparative Advantage.

The theory of comparative advantage states that society can benefit if we specialise in producing goods at which we are better at producing. Free trade enables lower prices, greater efficiency, economies of scale and greater choice. If we buy food only from our local area, we will be worse off, paying higher prices, and more inefficient production methods.

What about importing a Kiwi fruit from New Zealand? A kiwi fruit just wouldn't grown in the UK environment. Importing from New Zealand enables greater choice. If we don't feel guilty for buying cuddly toys from China, why should we feel guilty for buying Kiwi fruits from New Zealand?

3. The Solution?

If importing foods from New Zealand incurs an external cost (pollution from the transport) the solution is to impose a 'carbon tax' equivalent to the cost of pollution. Admittedly, this might be hard to precisely define. But, if consumers pay the social cost of importing the food then this can enable the most efficient production and distribution of resources around the world. We can then import strawberries from New Zealand without feeling guilty. We can also continue to enjoy the benefits of specialisation. The Tax raised from the carbon tax could be earmarked for 'environmental projects'

I actually quite like the idea of buying in season fruit and vegetables. If it can be sourced locally that is an added bonus. I also would be happy to pay a tax on the import of goods from overseas to cover the external cost of pollution (However, this should apply to all goods - not just fruit and veg).
Also, I would expect this tax to be a relatively low % of the price. If the GHG emissions from transporting food from oversees is only 4% of total GHG, it may be more efficient to tax meat on the grounds that this does greater environmental damage.

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